How can a logistics company grow in a down market? It’s no secret that logistics companies will have to adapt to be part of a down market.
It’s no secret that logistics companies are experiencing the effects of a down market. The industry has had to adapt and create new strategies to deal with the current situation. According to The Wall Street Journal, “After the pandemic-driven surge in consumer demand that triggered a frenzy of shipping activity and skyrocketing prices, logistics and transportation companies are signaling a fast slowdown.”
We spoke with experts in our company, and this is what they had to say:
Ben Marsh, Business Development Representative at Hubtek, believes that companies will put more resources towards improving their efficiency. “We are witnessing a paradigm shift, where companies who are embracing change are focusing on metrics such as transactional costs and load count per FTE. I believe that this type of change is good, not only for a down market but also for creating a leaner business moving forward.”
Other areas he says are important to focus on are our customer service and building relationships. “When times are good, this can sometimes be overlooked. However, at the end of the day, people buy from people they can trust and build a relationship with, and combining these two areas will be critical for growth in a down market.”
Mariana Valencia, Sales Director at Hubtek, says, “most of us have heard the phrase, ’recessions make the most millionaires’. Don’t get me wrong, recessions do hurt the economy a lot, and many businesses and people are affected, but recessions are also full of opportunities.”
She believes that one thing businesses can do to grow during tough economic times is to offer more affordable alternatives to their services. For example, Airbnb and Uber started during a recession to provide cheaper hotels and transportation options. “Now, I am not saying you should lower your prices a whole lot, you just need to get creative and look for more affordable alternatives.”
The next thing she says you can do is to develop and offer in-demand skills. Whether that comes from your employees becoming experts in these in-demand skills, or you find that service that is very needed and not a lot of companies are offering. If you can do this, the recession won’t be as much of a challenge to your growth.
Finally, we heard from Jose Ramirez, Business Development Representative at Hubtek. He affirms that it’s important for companies in the logistics and transportation industry to think outside the box in order to grow in a down market and to remember that it’s a cycle, so rates will eventually stabilize. “One strategy is to focus on providing a higher level of customer service. By going above and beyond for their customers, companies can differentiate themselves from their competitors and build a loyal customer base.”
He says that another way to grow is to invest in technology and automation. This can help streamline operations and increase efficiency, leading to cost savings that can be passed on to customers in the form of a lower price. He suggested that companies can also look to expand their offerings, which could include diversifying services to include different types of freight transportation or focusing on a specific market like refrigerated goods or hazardous materials. By doing so, companies can break through the noise and command higher prices for their services.
In conclusion, “Try to form strategic partnerships with other companies. It can be with complementary industries like warehousing or logistics software providers, to offer a more comprehensive solution to your customers. Or, it can be with other logistics providers to expand your reach and access new markets. If you’re a small company, own your backyard and never stop working on your book of business. Look to build long-term partnerships and stay committed to adding value each day. Don’t play the market, just keep doing your thing every day to reach your goals.”
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